Oil Futures Continue to Rise

Europe Planning to Ban Oil Imports from Iran

By Cori O'Donnell
Tuesday, November 29th, 2011

Oil futures have rose to above $100 per barrel on Tuesday for the second day in a row.

The Wall Street Journal (WSJ) reports that “Light, sweet crude for January delivery hit $100.06 a barrel, up $1.85, or 1.9%, on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.85 cents higher at $110.85 a barrel. Oil futures in the U.S. were up for a third consecutive day.”

Oil prices are said to have risen as European Union officials prepare to meet Thursday to discuss an EU-wide ban on imports of Iranian oil. Investors need to be ready for a shortage in supply.

"The on-again, off-again resolutions to the debt situation in the U.S. and Europe, in relation to oil prices, are dizzying," energy consultant and trader The Schork Group said in a report. "For the time being in the oil market, fundamentally driven headlines matter less and faux promises from American and European technocrats matter more."

Last year, Iran exported 2.2 million barrels of oil a day, according to the U.S. Energy Information Administration. Iran is the world’s third-largest oil exporter, and Europe in its entirety was the second-largest recipient of the oil, reports WSJ.

"If we see more issues in Iran, we're going to be playing well above $100 at that point," said Carl Larry, head of Oil Outlooks and Opinions, an energy newsletter. "There is a lot of fracturing going on over there, and it's going to raise tensions."

The fluctuating oil prices have raised many concerns. Commodity investors worry that Europe’s debt crisis will stifle global growth or possibly push other large economies into a recession, both situations would hurt the raw materials market.

That's all for now,

Cori


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